ECB: Makhlouf Maintains His Cautious Tone

In his post-meeting blog, Central Bank of Ireland Governor Makhlouf largely echoes the conclusions from yesterday's ECB decision, emphasising the need for policy to proceed cautiously. However, it's worth noting that Makhlouf appeared to favour such an approach to policy even before the March meeting, having previously cited risks to the inflation outlook.

Highlights from the blog:

• "The ongoing easing of wage growth momentum in the euro area, which has evolved broadly in-line with staff projections in recent months, should support services disinflation"
• "Inevitably and unfortunately, the economic outlook is shrouded in uncertainty. In this environment, it makes sense for policy to proceed cautiously".
• "The main uncertainty relates to US trade policy and actions taken in response that could further escalate geopolitical frictions. Facing such uncertainty, firms could postpone investment and re-assess their labour demand. ECB staff baseline projections downgraded the investment component of domestic demand to reflect this".
• "Furthermore, the projected consolidation of public finances will need to be revised given recent announcements to increase security-related spending. I will follow these developments closely to understand their impact on the growth and inflation outlook".